Philip Hammond to focus on avoiding Brexit 'cliff edge' after conceding on customs union

Posted On: 
18th June 2017

Philip Hammond has said his priority for the Brexit negotiations is avoiding a “cliff edge” in March 2019, as he declared single market and customs union membership were off the table. 

Philip Hammond on Downing Street
Credit: 
PA Images

The Chancellor, who is often viewed as one of the strongest opponents of so-called ‘hard Brexit’ in the Cabinet, argued the importance of a “smooth path” overrode even the eventual agreement on future trading terms.

Formal talks between the UK and European Union get underway tomorrow, almost three months after Theresa May set the clock ticking on a two-year negotiation window by triggering Article 50.

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There had been reports that Mr Hammond would use a round of media interviews this morning to press the case for a ‘softer’ form of Brexit, including potentially remaining members of the customs union. 

But Mr Hammond said the Government’s “ideal situation” remained the same as the objectives laid out by Mrs May in her Lancaster House speech earlier this year.

He conceded that membership of either the single market or customs union was off the table, and turned attention instead to the future relationship with those blocs and the transitional arrangements.

He told the BBC’s Andrew Marr Show: “We’re leaving the EU and because we’re leaving the EU we will be leaving the single market and, by the way, we’ll be leaving the customs union.

“The question is not whether we’re leaving the customs union; the question is what do we put in its place in order to deliver the objectives which the Prime Minster set out in the Lancaster House speech.”

Speaking later to ITV’s Peston on Sunday, Mr Hammond made clear the importance of avoiding drastic changes: “The most important thing to protecting jobs and prosperity is to make sure that we don’t have a cliff edge.

“We need a transitional arrangement to get from where we are now to whatever future arrangements we agree with the European Union. The most important ask from business – almost more important than what the end result looks like – is that we have a smooth path to get there. Because anything that created a cliff edge in 2019 would be very, very damaging to the UK economy.”

Foreign Secretary Boris Johnson – who, unlike Mr Hammond, was a prominent advocate of Brexit – made the case for leaving the customs union in a piece for the Sunday Times this morning which argued the Government would pursue an “open Brexit” policy with the goal of “frictionless” trade.

But Shadow Brexit Secretary Keir Starmer today insisted membership of the customs union could continue once the UK quits the EU.

“I think that should be left on the table,” he told the BBC’s Andrew Marr show.